Operational efficiency of shipping companies

Saravanan Venkadasalam, Azhar Mohamad and Imtiaz Mohammad Sifat

International Journal of Emerging Markets, 2020, vol. 15, issue 5, 875-897

Abstract: Purpose - This paper is the first comprehensive investigation of the shipping industry's efficiency in five countries from the ASEAN region: Malaysia, Singapore, the Philippines, Thailand and Vietnam. Design/methodology/approach - Employing Data Envelopment Analysis and Stochastic Frontier Analysis, this paper compares efficiency dynamics of 45 international and offshore shipping providers engaged in fishing and ferrying. Findings - The results indicate consistently diminishing efficiency from 2011 to 2017, a phenomenon that persists even in the traditionally efficient companies. Thereafter, this paper develops AltmanZ-scores for the sampled companies and notice that despite rising inefficiency, most firms remain unencumbered by bankruptcy concerns, especially those with large capital buffers. Research limitations/implications - In general, this paper observes a negative relationship between bankruptcy risk and efficiency. Furthermore, the paper notices that reducing inputs does not help boost efficiency. Originality/value - In terms of novel contributions, this paper is the first (to the best of knowledge) to set aZ-score for the ASEAN-based shipping companies.

Keywords: Efficiency; Data envelopment analysis; Stochastic frontier analysis; Z-scores; Shipping companies; C14; G33; R4 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-07-2019-0493

DOI: 10.1108/IJOEM-07-2019-0493

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